Mazie Supply Company uses the percent of accounts receivable method. On December 31, it has outstanding accounts receivable of $144,000, and it estimates that 2% will be uncollectible.

Prepare the year-end adjusting entry to record bad debts expense under the assumption that the Allowance for Doubtful Accounts has: (

-a $2,448 credit balance before the adjustment.

-a $720 debit balance before the adjustment.